RBI plan reserve to cushion investment value moves

INDIA - The Reserve Bank of India is toying with the idea of directing banks to create a special reserve as a cushion for any adverse movements in the value of their investment portfolios that may be triggered off by interest rate volatility.

This reserve is to be funded from a small portion of their net profit every year. The issue came up for discussion with select bank chairmen last week.

Banks have been asked to furnish details of their statutory liquidity ratio (SLR) portfolio and the impa